HB 236 
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1943c 





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Information Program 


on 


(HE tlBR^V 01 

CONGRESS 

AUG 8 1943 


Economic Stabilization 


To Keep Down the Cost of Living 


[SECOND EDITION—JULY, 1943] 


DECLASSSFfCATIOfl FILE NC. 


NOT r &R- GENERjiL ^M^mBUXimi 
For the me vj madia presenting information to the public 


OFFICE OF WAR INFORMATION gg|_ 

Domestic Branch.Washington, D. C. v|||f|r 














Information Program on Economic Stabilization to 
Keep Down the Cost of Living. 

Prepared by the Office of Program Coordination, Office of War Information, and reviewed 
by the Office of Economic Stabilization, Office of Price Administration, Treasury Depart¬ 
ment, Federal Reserve Board, Department of Agriculture, War Labor Board, and War Food 
Administration. 


Second Edition. 
July 1943. 


Preface 

Experience has shown that a basic information outline is necessary for any 
information program dealing with the war effort if confusion is to be avoided 
and a clear-cut, understandable presentation of the facts made to the public. 

The basic information program book contains the following: 

I. A statement of the problem which requires the action of the people 
and their Government—in this case preventing inflation by hold¬ 
ing down prices and wages in keeping with congressional mandate 
of October 2, 1942, and the President’s Executive Order of April 
8, 1943. 

II. A description of the program to cope with the problem. 

III. A statement of the objectives of the information program. 

IV. Suggestions for the treatment of the information so that it may be 
presented to the people in the most understandable form possible. 

The basic information outline thus provides background material for OWI 
Media Bureaus, for the information departments of the various Government 
agencies concerned with the campaign, and for advertisers and media wishing to 
cooperate in bringing the message to the public. 


57 " 5 3 5 " 0-3 





The Information Program at a Glance 


The Problem of Rising Prices in 
Wartime: 

It is absolutely necessary that we hold 
prices down and this can be done. Our indi¬ 
vidual welfare, as well as our national wel¬ 
fare, depends on a strong national program 
of economic stabilization. 

The danger of a serious price rise is great 
in wartime. The war has created a huge 
supply of spendable income and at the same 
time has reduced the supply of goods and 
services available for civilians. The result¬ 
ing volume of excess purchasing power exerts 
an intense upward pressure on prices, as 
buyers bid against each other for scarce 
goods, sellers seek higher prices and profits, 
and workers seek higher wages. As this 
pressure causes price rises to occur, they in 
turn force up the prices of other goods, tend 
to push up wages and business costs, and can 
set in motion a mounting spiral of price and 
wage increases. 

If prices were to get out of control—and 
they have not—economic disorganization 
could result which would lengthen the war, 
cause hardships for nearly every one—now or 
later—and make difficult the attainment of 
many of the benefits of the peace to come. 

The pressure of excess purchasing power 
must be met in two ways: 

1. It must be reduced by diverting it into 
channels other than the purchase of 
goods; e. g., higher taxes, buying War 
Bonds, savings, life insurance, etc. 

2. It must be met directly —by Government 
controls on prices and wages and by 
voluntary civilian action. 

In other words, all unnecessary spending 
must be avoided and group or individual pres¬ 
sures for higher prices and higher wages 
must be resisted. 

The Program to Hold Down Prices: 

The program to hold down the cost of living 
revolves mainly about the seven-point pro¬ 


gram proposed to Congress by the President 
on April 27,1942. 

The program calls for a two-way attack on 
the danger of rising prices. One group of 
measures seeks to drain off excess purchasing 
power and thus reduce the pressure on prices 
by 

—taxing individuals and corporations 
heavily; 

—discouraging installment and credit pur¬ 
chases ; 

—diverting excess purchasing power into 
nonliquid channels such as War Bonds, 
insurance, and savings. 

These measures are designed to reduce the 
number of dollars bidding for a limited sup¬ 
ply of goods. But, in addition, it is necessary 
to utilize direct controls on prices and dis¬ 
tribution. A second group of measures 
attempts to (< sit on the lid” of prices by 

—putting ceilings on the prices of most 
consumer goods and on rents; 

—rationing scarce goods; 

—stabilizing wages; 

—stabilizing farm prices. 

Thus far the program has worked with a 
considerable degree of success, but many ex¬ 
perts, both in and out of Government, believe 
that stronger controls are necessary. It 
should be remembered that the program is 
two-sided, involving both Government and 
civilian action. 

What Civilians Can Do To Help Hold 
Down Prices: 

Although the activities of Government 
must be the focal point of any program to 
hold down prices, civilians must act by doing 
the following if the program is to be fully 
successful. 

1. Buy and hold as many War Bonds as you 
can afford. 

2. Pay willingly any taxes . . . increased 
taxes . . . that your country needs. 


n 


3. Pay off your debts and avoid making 
new ones. 

4. Provide for your own and your family’s 
future with adequate life insurance and 
savings. 

5. Pay no more than ceiling prices. Buy 
rationed goods only by exchanging 
stamps. 

6. Buy only what you need. Make the arti¬ 
cles you have last longer by proper care 
and avoidance of waste. 

7. Don’t try to profit from the war. Don’t 
ask higher prices if you are a business¬ 
man or farmer. Don’t ask for higher 
wages or salaries. 

Objectives of the Information 
Program: 

The information program must create such 
an understanding of the problem that the 
people will support steps necessary to hold 
down prices and will do all they can to hold 
down prices and wages by their own volun¬ 
tary actions. 

People Must Understand — 

That the higher incomes which many of 
them enjoy today arise directly out of the 
war and that they have a responsibility to 
use their incomes to help speed victory. 
War is not the time to improve one’s stand¬ 
ard of living; it is a time of sacrifice. 

How prices can get out of control unless 
all of us do our part . . . how one price 
increase leads to another, then to a wage 
increase, then to another. 

The elements of the wartime economic 
program and the relation of each element 
to the rest of the program. 

That it is contrary to their own interest 
to do anything which will help foster a 
serious rise in prices. 


That it is unpatriotic to do so. 

That they must practice self-restraint, 

make sacrifices . . . sometimes unequal 

ones. 

It is especially important that they under¬ 
stand the need of foregoing their own tempo¬ 
rary advantage— foregoing unnecessa/ry pur¬ 
chases, foregoing price and wage increases, 
resisting the attempts of others to increase 
their prices or wages. 

This understanding must be in such inti¬ 
mate personal terms that people will do all of 
the seven things (mentioned previously) by 
which they can help hold down prices. 

Suggestions for the Informational Ap¬ 
proach (all media should keep these 
points constantly in mind). 

1. The complexities of the problem should 
be avoided by always explaining it in 
simple, personal terms. 

2. The word “inflation” should be avoided 
wherever possible. People are confused 
by it. Such terms as “high cost of liv¬ 
ing,” “rising prices,” “uncontrolled rise 
in prices,” “holding prices down,” 
“keeping prices and wages down” are 
much more understandable and usually 
more specific and accurate. 

3. AVOID CREATING FEAR ABOUT 
PRICES. This is of utmost importance, 
because such expectations in themselves 
easily can cause prices to rise and to get 
out of control. 

4. All phases of the program should be con¬ 
stantly and consistently linked together; 
for they are interdependent. 

5. The same holds true for what people can 
do by their own actions to hold down 
prices; for they, too, are interdependent. 

PLEASE READ SECTIONS III AND IV OF THE 
PROGRAM BOOK CAREFULLY AND IN DETAIL 


in 


I 


/ 























1 





Information Program on Economic Stabilization To Keep Down the Cost of Living 


Table of Contents 

Page 

I. THE PROBLEM OF RISING PRICES IN WARTIME_ 1 

Necessity of holding prices down_ 1 

Danger of price rises in wartime and how prices rise_,_ 1 

Need of direct and indirect controls_ 3 

Success thus far in holding down prices_ 3 

Need of stronger controls._ 3 

Psychological problems of holding down prices_ 4 

Possible consequences of an uncontrolled price rise_ 5 

The price problem will not cease immediately with peace_ 7 

II. THE PROGRAM FOR ECONOMIC STABILIZATION_ 8 

Guiding principles of the program_ 8 

Early steps toward price stabilization___._ 8 

The program from the Emergency Control Act to the President’s 

7-point message_ 9 

The program until the “hold-the-line” order: 

Taxation and control of profits_ 10 

Encouraging saving__ 10 

Discouraging installment buying_ 10 

Control of prices___ 10 

Rent control_...._—11 

Farm price stabilization..._ 11 

Control of wages_ 12 

Rationing_ 12 

Actions subsequent to the “hold-the-line” order.__ 13 

III. OBJECTIVES OF THE INFORMATION PROGRAM_ 15 

IV. SUGGESTED INFORMATION APPROACH 16 

General cautions___ 16 

Specific suggestions: 

“Understanding” suggestions_ 17 

“Action” suggestions_ 18 

Suggestions for treatment of “understanding” and “action” informa¬ 
tion_:- 


19 





































































Economic Stabilization To Keep Down the Cost of Living 


Page 1 


I. The Problem of Rising Prices in Wartime 

(Note. —This section states the problem; does not suggest how the information program should be devel¬ 
oped. It is most important that you read sections III and IV regarding the treatment of information so that 
it will be most understandable.) 


1. It is absolutely necessary for the welfare 
of our citizens and for the national well¬ 
being as a whole, that we keep prices 
down. 

A serious rise in prices is the enemy of 
economic stability; and our individual 
welfare, as well as the national welfare, 
depends upon a strong national program 
of economic stabilization. 

2. History shows that large-scale and long- 
continued military expenditures, financed 
in ways that give people more, rather 
than less, money to spend without a cor¬ 
responding increase in things to buy, 
have been a common underlying cause of 
serious uncontrolled rises in prices in 
wartime. 

3. The danger of a serious rise in prices is 
great in time of total war: 

a. Total war demands such a huge 
amount of goods and services that a 
large part of our productive capacity 
must be converted from the production 
of peacetime goods to producing the 
materials of war. 

The astronomical growth of total 
war’s demand for goods and services 
is illustrated by the following figures: 

1939— we spent 1.4 billions to buy 
goods and services for war 
purposes (2 percent of our 
gross national income—the 
sum of expenditures by Gov¬ 
ernment, by consumers, and 
by private business for capi¬ 
tal formation). 

1940— we spent 2.7 billions ($3 out 
of every $100). 

1941— we spent 12.5 billions ($10 
out of every $100). 


1942— we spent 49.1 billions ($32 
out of every $100). 

1943— it is estimated (on the cur¬ 
rent rate of expenditures) 
that we will spend about $90 
billions or about $50 out of 
every $100. 

Thus in 1940, the year before Pearl 
Harbor, we spent only one dollar out 
of every thirty-three of our gross na¬ 
tional income for war purposes; one 
dollar out of ten in 1941; one dollar 
out of three in 1942; and, according to 
present estimates we will spend about 
one out of every two dollars of our 
gross national income for our war 
against the Axis in 1943. 

b. Obviously such a huge diversion of our 
productive capacity to the war effort 
requires the conversion of a large per¬ 
centage of our industry to war produc¬ 
tion- Such conversion also reduces 
the amount of available consumer 
goods and services. 

The reduced amount of goods pro¬ 
duced for civilians is illustrated by the 
following production figures: 



1940 

1942 

1943 

Passenger automobiles 

(thousand units) 

3, 715 

11. 8 

226 

(Estimate) 

Radios and phonographs 
(million units) ___ _ 

3. 5 


Mechanical refrigerators 
(thousand units) _ 

2, 600 

3, 639 

520 


Heating stoves (thousand 
units)__ 

*3, 094 

1,274 

Razor blades (billion units) 

2. 1 

1. 9 

1. 8 

Cooking stoves (thousand 
units)....— 

4, 162 

*2, 456 

1, 041 

Electrical appliances 
(million dollars).. 

75 

15 

1. 5 

Private construction (bil¬ 
lion dollars)-- 

4. 4 

3. 0 

1. 5 


* Includes military use. 























Page 2 


Economic Stabilization To Keep Down the Cost of Living 


Even Federal, State, and local non¬ 
war expenditures were affected, as 
government units converted to a war¬ 
time basis. In 1939 expenditures for 
this purpose were 14.6 billions; in 
1941, 13.1 billions; and in 1942, 12.5 
billions. 

c. But more people are working than ever 
before—working harder and iv or king 
longer. 

Thus in 1939 there were 29.8 million 
civilians employed in nonagricultural 
work; these figures exclude proprie¬ 
tors, self-employed persons, and do¬ 
mestic servants, military and naval 
forces and emergency workers. But 
by April 1943 this figure had risen to 
38.4. Of these, 13.7 millions were 
engaged in manufacturing as against 
8.2 millions in 1939; the increase being 
due almost entirely to the war effort. 

Not only were more people working, 
but they were working harder and for 
longer hours. In 1939 the average 
hours worked per week in durable 
manufacturing industries was 38; in 
April 1943 it had risen to 46.7 hours. 
In 1939 the average work week in non- 
durable manufacturing industries 
(textiles, foods, paper, chemicals, pe¬ 
troleum, rubber, etc.) was 37.4 and in 
April 1943 it had risen to 42.4 hours. 

d. Moreover, like the supply of goods, the 
supply of labor also is scarce; so that 
there is a pressure for the “upping” of 
salaries and wages. There is also a 
tendency for farm prices and business 
profits to rise. 

The results of this upward pressure 
are illustrated in the following figures: 
The total amount paid out in wages 
and salaries increased from $46.4 
billion in 1939 to $89.7 billion in 

1942. Average weekly earnings of 
workers in manufacturing indus¬ 
tries rose from $23.86 in 1939 to 
$36.65 in 1942 and to $42.48 in April 

1943. 


Farm wage rates were 104 percent 
of the 1935-39 average in 1939, 
158 percent of that average in 1942, 
and 218 percent of it in June 1943. 
The net income of farm operators 
was $4.5 billion in 1939—$10.2 bil¬ 
lion in 1942. 

Net corporate profits (before taxes) 
amounted to $5.5 billion in 1939— 
to $19.7 billion in 1942. Net corpo¬ 
rate profits after taxes rose from 
$4.2 billion in 1939, to $7.7 billion in 
1941, and then remained compara¬ 
tively stationary. 

Not all of these profits, of course, 
were disbursed to individual stock¬ 
holders. Because corporations 
needed money for conversion, ex¬ 
pansion and post-war contingen¬ 
cies, dividend payments increased 
only slowly between 1939 and 1941, 
and actually declined in 1942. In 
all 3 years, however, dividends con¬ 
stituted a fairly substantial item— 
$3.85 billions in 1939; $4.44 billions 
in 1941; $4 billions in 1942. 

Interest payments increased slightly 
during this period—from $5.1 bil¬ 
lions in 1939 to $5.3 billions in 1941 
and $5.4 billions in 1942. 

e. All of this means a tremendous in¬ 
crease of the amount of money in the 
possession of the public. 

Thus in 1939 income payments to in¬ 
dividuals in this country amounted to 
71 billion dollars; in 1941 to 92 bil¬ 
lions ; and in 1942 to 116 billions. The 
estimated income payments to indi¬ 
viduals for 1943 is about $140 billions. 
/. People desire various kinds of goods 
and services and have plenty of money 
to pay for them. Thus they will want 
to use their portion of this huge supply 
of money to bid competitively for the 
limited supply available. In conse¬ 
quence, prices are forced up. 

Compare the income of individuals 
with the available goods and services 





Economic Stabilization To Keep Down the Cost of Living 


Page 3 


and you can see the pressure which is 
being exerted on prices even after 
taxes have been subtracted: 



1942 

1943 

(Est.) 


Billion Dollars 

Income payments to individuals- 

116 

140 

Personal taxes, etc_ 

7 

1 15 

Disposable income 

109 

125 

Consumer goods and services. 

Excess of disposable income 
over consumers’ goods and 

82 

2 80 

services in 1942 prices 

27 

45 


»Under present laws. 
! In 1942 prices. 


This pressure was so strong that, de¬ 
spite partially successful efforts to 
resist it, the cost of living was pushed 
up in 1942 to 18 percent above the 
August 1939 level; by May 1943, the 
increase was more than 26 percent. 

g. Thus underlying conditions of an ex¬ 
tensive price rise exist today in this 
country. Control of prices, therefore, 
is imperative. 

4. The price structure of the country is com¬ 
plex and closely knit. A rise in the price 
of one commodity increases the cost of 
making or distributing other commodi¬ 
ties and creates a pressure for raising the 
prices of these goods. Thus a mounting 
flood of price increases can be generated. 

In discussing price we frequently forget 
that increased wage rates exert a heavy 
pressure on other prices. Wages are a 
part of cost. When they rise, costs rise. 
If higher wages force up prices, the cost 
of living is increased and there is a pres¬ 
sure for even higher wages. This, too, 
helps to swell the mounting flood of price 
increases. 

Therefore, controls must be imposed on: 
Prices of farm products and raw ma¬ 
terials. 

Manufacturers’, wholesale and retail 
prices. 

Wages and salaries. 

Rents and the prices of services such as 
transportation, power, etc. 

Profits. 


5. Direct controls—ceilings on prices and 
wages—are not enough in themselves to 
hold down prices and the cost of living 
over any period of time. 

Direct controls are “sitting on the lid.” 
Meanwhile the tremendously increased 
supply of purchasing power continues to 
exert pressure from beneath the lid. 

This pressure must be relieved by drain¬ 
ing it off into channels which will help 
pay directly for the war—taxes and the 
purchase of War Bonds. 

This is of primary importance; for it re¬ 
lieves the pressure at the source and thus 
makes the task of price control easier. 

Therefore, two means must be used to 
hold the line against a rise in prices. 

a. The pressure of excess spending power 
must be reduced by putting these dan¬ 
gerous dollars to work in winning the 
war—by putting them into taxes and 
War Bonds. 

A large portion of the 45 billions of 
excess dollars, over and above the 
value of estimated available goods and 
services for civilians must be diverted 
into these channels if the pressure on 
prices is to be minimized. 

b. Prices and wages must be controlled. 

6. Thus far there has been considerable suc¬ 
cess in holding the line against rising 
prices and ballooning wages and there¬ 
fore against a rising cost of living; more 
than is usually realized, but LESS than 
will be necessary to prevent dangerous 
price rises in the future- 

(Note.— Before using the following figures 
in informational material, it is well to check 
with the Office of Program Coordination, 
OWI, to ascertain if later ones are available.) 

As an example of the degree to which 
prices have been controlled, the cost-of- 
living index rose at a rate of 13 percent 
a year from December 1941—the month 
Pearl Harbor was attacked—until May 
1942, when the General Maximum Price 
Regulation was put into effect. From 

















Page 4 


Economic Stabilization To Keep Down the Cost of Living 


May 1942 to May 1943 the rise was 
slowed to 7.8 percent. 

The degree of effectiveness of price con¬ 
trols, where applied, is illustrated by the 
fact that from May 1942 (when GMPR 
was put into effect) until January 1943, 
the controlled items of the cost-of-living 
index rose but 1.5 percent, while the un¬ 
controlled items rose 10.2 percent. 
(Since January 1943 nearly all basic 
cost-of-living items have been subject to 
price control.) 

The effect of price controls is evidenced 
even more clearly by the relative rates of 
change (increase or decrease) in the Bu¬ 
reau of Labor Statistics Cost-of-Living 
Indexes for principal items of consump¬ 
tion during the period May 1942- 
May 1943 (the period since GMPR went 
into effect) as compared to the corre¬ 
sponding period May 1941-May 1942 
(before GMPR). 



Percentage Changes in 
the BLS Cost-of-Living 
Indexes 


May 1941 
to 

May 1942 

May 1942 
(GMPR) 
to 

May 1943 

All Items _ _ _ 

Percent 
12. 1 

Percent 

7.8 

Food_ 

19.0 

17.6 

Clothing_ 

23.0 

1.3 

-1.7 

Rent.. . 

3.1 

House furnishings_ . 

17.1 

2.0 

Fuel, ice, and electricity_ 

3.1 

2.6 

Miscellaneous. 

8. 1 

3.8 



On the wage front, increases have been 
held to a substantial degree. Between 
September 1942 and February 1943, in¬ 
dustrial transportation, trade and service 
pay rolls increased 4.9 percent. Three- 
quarters of this rise resulted from ex¬ 
panding employment, increases in hours 
of work and shifts of workers from low- 
paid civilian to higher-skilled and higher- 
paid war jobs. One-quarter of the rise 
resulted from changes in the price of 
labor (basic wage and salary rates). 

Between October 1942, when the WLB 


was given authority over wage increases 
reached through voluntary negotiations, 
and May 1943, wage adjustments ap¬ 
proved by the Board affected prices in 
only four out of every 1,000 cases volun¬ 
tarily submitted to it. (This included 
98.6 percent of all cases.) 

7. The price pressure today is intense; but 
not so intense that it cannot be controlled 
by a strong national policy of economic 
stabilization. 

The situation is serious because of the 
great pressure of excess purchasing 
power—our 45 billion against 
pressure for increased wages, 
pressure for increased farm prices, 
pressure for higher price ceilings. 

8. The problem of “all-around” holding 
down prices is almost as much a psycho¬ 
logical one as it is legislative and regula¬ 
tive. 

There are two major psychological as¬ 
pects to the problem: 

The first is the fact that people are all 
for holding down the prices of the 
things they buy, but are not always for 
holding down the price of what they 
have to sell. 

This is true of workers, farmers, and 
businessmen. When either asks for an 
exception to the rule, he seriously weak¬ 
ens it. 

Wages, prices, and profits must be 
kept down if the general price level is 
to be kept down. 

The second is the fact that, if people 
expect prices to rise rapidly—and if 
they have money to buy goods—they 
will rush out to buy before prices go 
up any farther. This, of itself, will 
help to force up prices. 

Thus A FEAR OF RISING PRICES 
can generate a most dangerous pres¬ 
sure for price increases and seriously 
hinder the achievement of economic 
stabilization. 



















Economic Stabilization To Keep Down the Cost of Living 


Page 5 


9. Should we fail to hold prices down, most 
serious consequences can ensue. 

a. A serious rise in prices and wages 
would increase the cost of the war and 
could easily help to lengthen it. 

If prices doubled it would raise the 
cost of the war from $250,000,000 a 
day to $500,000,000 a day—all of 
which would have to be paid out of 
taxes and the increased sale of War 
Bonds. 

If prices rose rapidly and unevenly— 
as they would if uncontrolled— 

The weekly wages of some 50,000,- 
000 persons would have to be raised 
time and time again. That adjust¬ 
ment would take place unevenly, 
would create much confusion and 
conflict, would foster labor disputes 
and hurt morale . . . would impair 
the war effort. 

Every business unit in the land 
would face such maddening uncer¬ 
tainties in every item of costs from 
a rapid upsurging in prices that 
businessmen would not know how 
to plan their operations. Confu¬ 
sions would result. The war effort 
would be slowed up. 

b. Few, if any, would benefit from a seri¬ 
ous rise in prices; and practically all 
would suffer in the end. 

Those with relatively fixed incomes 
would suffer at once. 

And this is a very considerable propor¬ 
tion of the entire population. During 
the last half of 1942 between 12 and 13 
million people, it is estimated, were 
directly dependent—in whole or in 
large part—upon relatively fixed in¬ 
comes. This includes two large 
groups: nearly six million federal, 
state and local Government employees, 
including teachers; and more than six 
million individuals receiving public 
assistance, military allotments, vet¬ 


erans’ and civil-service pensions, rail¬ 
road retirement payments, and old-age 
and survivors insurance under the 
social security system. It does not 
include the more than eight million 
men in the armed services, the many 
large groups of workers, including 
white collar workers, whose wages 
rise with notorious slowness, nor the 
considerable group of people receiving 
annuity payments from life insurance 
companies. 

Some of this group of 12 to 13 million, 
it is true, had other sources of income 
less fixed in character. But this is 
more than offset by the fact that many 
of them had others dependent upon 
them. For example, from eight to ten 
million people, it is estimated, were 
dependent upon the earnings of gov¬ 
ernment employees. Even when al¬ 
lowance is made for duplication, it 
appears that upwards of 20 million 
people were largely dependent upon 
relatively fixed sources of income. 
Millions more, of course, were partly 
dependent upon fixed sources of in¬ 
come, such as interest and life insur¬ 
ance payments. 

c. Those who received increases in wages 
or prices would live in a foots paradise 
for which the final day of reckoning 
would be swift and certain. 

There would be no more civilian goods 
to buy than there are now. It merely 
would take more dollars to buy those 
goods—dollars which, if prices had not 
risen, could be put away to buy greatly 
improved goods after the war. 

Prices usually start rising faster than 
wages, so that consumer purchasing 
power lags behind rising prices. Busi¬ 
ness also would have begun to stagnate 
under the weight of increased costs 
and mounting uncertainties of opera¬ 
tion. At this point, it would take very 
little to knock down the house of cards 






Page 6 


Economic Stabilization To Keep Down the Cost of Living 


which uncontrolled price rises had 
reared. 

Material curtailment of Government 
expenditures for war production— 
once the war is over—would reduce 
business activity unless the manufac¬ 
turing plants and their labor could be 
diverted to the production of peace¬ 
time goods. 

However, with purchasing power 
“squeezed” by the high prices, the 
civilian market only could absorb these 
goods at reduced prices. Conse¬ 
quently prices would start to fall. 

Once prices started down, they would 
come tumbling. The whole price 
structure would collapse like a house 
of cards. There would be panic and 
depression. 

After the last war, inflation was fol¬ 
lowed by drastic deflation. From 
early 1920 to 1921 wholesale prices 
fell an average of 45 percent. The 
collapse following the last war 
brought industrial production and 
factory payrolls down 30 percent, 
created widespread business losses 
and unemployment. 

Such a rapid drop in prices would 
mean untold suffering for many. 

For wage earners it would mean seri¬ 
ous cuts in wage rates, reduced work¬ 
ing hours and actual unemployment. 
There would be less money to pay off 
mortgages on houses bought at high 
prices; less money to meet insurance 
premiums on policies bought when 
prices and wages were high. 

After the last great war employment 
fell by 5 million, wage payments in 
manufacturing industries fell from 
$13.6 billion to $8.3 billion; average 
earnings in manufacturing fell from 
$1,464 a year in 1920 to $892 a year in 
1921. In the great depression of the 
’30s the collapse was even worse. Sal¬ 
aries and wages in private industry 


fell from $47i/ 2 billion in 1929 to $24y 2 
billion in 1933; about 15 million peo¬ 
ple were thrown out of work out of a 
total of less than 50 million who were 
employed in 1929. In manufacturing 
alone, payrolls fell 65 percent 

For farmers it would mean less money 
coming in to pay for farms and equip¬ 
ment bought during the period of high 
prices. It would mean failure and 
foreclosure. (Raw material prices 
tend to drop even faster and farther 
than do the prices of finished goods.) 

Farmers went through the same tragic 
experience. After the last war the 
prices they received dropped from 244 
percent of the 1909-14 average in May 
1920 to 113 percent in May 1921, a fall 
of 54 percent; the prices they paid, 
including interest and taxes, fell only 
20 percent, while the debts they had 
incurred at high prices remained con¬ 
stant. In the great deflation of the 
’30s the prices farmers paid, including 
interest and taxes, fell 33 percent, but 
farm prices fell 64 percent. Net in¬ 
come of farm operators, which was 
$5.2 billion in 1929, shrank to $1% 
billion in 1932. In the years from 1930 
to 1933, 650,000 farms went under the 
hammer. (Distressed sales other than 
tax sales.) 

For businessmen—many of them—it 
would mean severe losses and financial 
readjustments; often receivership or 
bankruptcy. 

In both deflations the businessmen 
suffered along with everyone else. 
After the last war production fell 30 
percent and corporate profits, which 
were $5.9 billion in 1919, crashed to 
$400 million in 1921. Again after 1929, 
production fell over 60 percent. Cor¬ 
porate profits in 1929 were $7.2 billion; 
by 1932 not only had they been com¬ 
pletely wiped out, but they had been 
converted into losses of $3.6 billion. 





Economic Stabilization To Keep Down the Cost of Living 


Page 7 


d. A serious rise in prices and consequent 
later price collapse could rob us of 
many of the benefits of the peace to 
come. 

The complete collapse of prices would 
bring business stagnation that would 
eat up all the savings of the high-price 
period and would rob people of the 
Freedom from Want for which we are 
fighting. 

Interest charges on War Bonds and 
the Bonds themselves still would have 
to be paid. But the volume of these 
payments would be much greater than 
would have been necessary if prices 
had not been allowed to rise. These 
payments would require large amounts 
of taxes—involving much heavier sac¬ 
rifices for those that paid them, now 
that prices, incomes, and wages had 
dropped. 


All of this would take money and na¬ 
tional energies which, if prices had not 
been allowed to rise in uncontrolled 
fashion, could have been used to build 
a strong, stable, prosperous nation. 

10. The pressure of rising prices will not stop 
immediately after the war, but will con¬ 
tinue— 

because war production will not stop 
at once; 

because a large supply of consumer 
goods will not come on the market at 
once; 

because people will have large sup¬ 
plies of savings and bond investments 
which they will want to spend imme¬ 
diately for goods and services. 

The more we do now to hold down prices, 
the easier it will be for us to make the 
shift to peacetime. 





Page 8 


Economic Stabilization To Keep Down the Cost of Living 


II. The Program For Economic Stabilization 

(Note. —This section has been included as a matter of reference for dates of official actions and the rea¬ 
sons for them. It has been prepared as background and explanation, and is not designed either for detailed 
use in the program, or to suggest how the program should be developed. Please read Sections III and IV for 
suggestions as to the treatment of information so that it will be more understandable.) 


Guiding Principles: 

In order to hold prices down and to promote 
economic stabilization, the problem of rising 
prices must be attacked from two angles: 

1. The pressure of the mounting excess 
spending power must be relieved by 
putting this money to work in winning 
the war—through payment of taxes and 
purchase of War Bonds. 

2. Strong direct controls must be exerted 
on prices and wages. 

What must be done to make this joint at¬ 
tack on rising prices successful was set forth 
by the President in his 7-point program pre¬ 
sented before Congress on April 27,1942: 

1. Tax heavily and keep profits down. 

2. Fix ceilings on prices and rents. 

3. Stabilize wages. 

4. Stabilize farm prices. 

5. Save more, buy less. 

6. Ration all essential commodities that 
are scarce. 

7. Discourage installment buying and en¬ 
courage paying off debts. 

Application of the Principles (a run¬ 
ning account): 

1. Early steps toward price stabilization. 
The program for price stabilization be¬ 
gan on May 28, 1940, when the Price 
Stabilization Division was established 
as a part of the Advisory Commission 
to the Council of National Defense. The 
Division confined itself largely to price 
watching rather than price control, but 
it exercised some restraining influence 
over many important raw materials 


(copper, lead, zinc, glue, wool, farm 
implements, etc.). 

By February 1941, defense expenditures 
were running at $7 billion a year, almost 
five times as great as in the previous 
May. Wholesale price rises were be¬ 
coming serious. The index of 28 basic 
commodities rose 25 percent from Feb¬ 
ruary to June 1941. In the first half of 
1941 hogs were 56 percent higher, cot¬ 
tonseed oil more than doubled. Short¬ 
ages had spread; bottlenecks developed; 
prices caused by specific shortages 
threatened to start a general wave of 
price increases. Price pressures be¬ 
came too strong to be coped with through 
consultations with industry and public 
warnings. The Price Stabilization Di¬ 
vision, therefore, issued five maximum 
price schedules covering second-hand 
machine tools; aluminum scrap and sec¬ 
ondary aluminum ingots; zinc scrap and 
secondary ingots; iron and steel scrap; 
and bituminous coal. With the excep¬ 
tion of bituminous coal (issued to pre¬ 
vent a run-up during a strike and later 
revoked when the strike ended) these 
were designed to keep down prices of 
products most acutely demanded in 
“tooling up” for defense. They did not 
have the force of penalties behind them, 
but depended for enforcement on pub¬ 
licity and the voluntary cooperation of 
the industry. They proved to be inade¬ 
quate. 

Rising price pressure led to the replace¬ 
ment of the Division with the Office of 
Price Administration and Civilian Sup¬ 
ply (OPACS) in April 1941. On April 
16, 1941, OPACS imposed a ceiling on 





Economic Stabilization To Keep Down the Cost of Living 


Page 9 


all iron and steel products—to prevent a 
wage increase of 10 cents an hour from 
causing an increase in prices. This ac¬ 
tion extended price control over about 12 
percent of the wholesale value of manu¬ 
facturing. It had the effect of holding 
down the prices of the most important 
materials used directly and indirectly in 
our armament program. 

By August 1941, OPACS had brought 
nearly one-quarter of the wholesale price 
structure, chiefly metals and other im¬ 
portant industrial raw materials, under 
formal or informal price agreements. 
As a result an important element of 
manufacturing costs was stabilized. 

However, the pressure on prices became 
increasingly severe. Defense expendi¬ 
tures had passed the $12 billion a year 
level. By this time production of civilian 
goods had reached its peak. Henceforth, 
it was to decline, in spite of increasing 
purchasing power; although some relief 
was provided during the coming months 
by enormous inventories. Production of 
war materials increased rapidly, employ¬ 
ment grew. Stronger measures to con¬ 
trol prices were imperative. Accord¬ 
ingly, steps began to be taken along sev¬ 
eral of the lines later incorporated in 
the 7-point program. 

Control of prices.—By December 1941, 
nearly 40 percent of the wholesale price 
structure was either under formal or in¬ 
formal control, although no important 
retail prices were under control. 

Discouragement of installment buying.— 

In September 1941, the Federal Reserve 
Board’s Regulation W inaugurated re¬ 
strictions on consumer installment credit 
by increasing downpayments and short¬ 
ening maturity periods for 24 metal¬ 
using commodities. 

From May 1940, when the defense pro¬ 
gram was inaugurated, to January 1942, 
when emergency Price Control Act be¬ 
came law, wholesale prices had risen 


over 22 percent and the cost of living 
had risen 12 percent. 

Taxation.—Two revenue acts were en¬ 
acted in 1940 and one in 1941. The first 
Revenue Act of 1940 levied the defense 
tax, reduced personal exemptions, and 
increased certain surtax rates; the Sec¬ 
ond Revenue Act of 1940 levied the 
excess-profits tax; and the Revenue Act 
of 1941 provided for further lowering of 
personal exemptions and a considerable 
increase in personal income tax rates. 

2. From the Emergency Price Control Act 
(January 30, 1942) to the President’s 
message of April 27, 1942. 

The Act gave OPA undisputed authority 
to control prices and rents, and provided 
specific means to punish violators; but 
limited OPA’s power to control farm 
prices and the prices of products proc¬ 
essed from them. 

Significant actions taken by various 
Government agencies to hold down 
prices during this period were as follows: 

Rationing.—While rationing does not act 
directly as a price control, it helps to 
hold down prices. During the period 
January 27-April 20, tires, automobiles, 
and typewriters were rationed. 

Rent Control.—On March 2, 1942, OPA 
designated 20 “defense-rental” areas in 
13 States. The Administrator recom¬ 
mended that residential rents be reduced 
to (or stabilized at) levels prevailing on 
a designated “maximum rent date.” 
Generally this was the most recent date 
when the rental market was not unduly 
affected by the impact of war activities. 
After 60 days, if local action was not 
taken, the Administrator was empow¬ 
ered to set a Federal rent ceiling. 

Wholesale prices had continued to rise in 
this period, although not quite as rapidly 
as in previous months. But the rise in 
cost of living had not slowed up at all. 





Page 10 


Economic Stabilization To Keep Down the Cost of Living 


3. From the President's message of April 
27, 19U2, to April 8, 19^3, when the 
President's t( hold-the-line" order was 
promulgated. 

Steps to Reduce the Pressure on Prices: 

a. Taxation and Control of Profits. 

The Revenue Act of 1942, enacted on 
October 20, provided $4 billions more 
in revenue from the individual in¬ 
come tax on 1942 incomes of indi¬ 
viduals than if the income-tax rates 
previously effective had remained in 
force. In addition, the Victory tax 
was enacted to apply to 1943 incomes, 
and it is estimated that the Victory 
tax liability of individuals on their 
1943 incomes will amount to a little 
less than $3 billions. Altogether, the 
portion of Federal tax liabilities of 
individuals actually due in 1943 was 
raised by about $6.5 billions as a re¬ 
sult of the Revenue Act of 1942. 
These tax increases, however, did not 
keep pace with increases in income 
payments. Income payments in the 
fourth quarter of 1942 were running 
at the rate of $127 billions a year, $21 
billions higher than the average rate 
for the first quarter of the year, when 
the revenue bill of 1942 was first 
taken up. Moreover, it is estimated 
that income payments in the calendar 
year 1943 will amount to something 
like $140 billions. 

b. Encouraging Saving. 

The Victory Fund Drive in December 
1942 yielded $13 billion, substantially 
exceeding the announced goal of $9 
billion. 

In April 1942, about 12 million peo¬ 
ple, including men in the services, 
were participating in the pay-roll 
savings plan and were having $96 
million a month, or 4.9 percent of 
their pay, deducted for the purchase 
of War Bonds. In June 1943, there 


were about 27 million people partici¬ 
pating and they were contributing 
$425 million a month, or 9.1 percent 
of their pay. 

In its Second War Loan Drive in 
April 1943 the Treasury sought to 
raise $13 billion and actually raised 
$18.5 billion. 

c. Discouraging Installment Buying. 

May 6, 1942.—Consumer credit re¬ 
strictions were tightened, chiefly by 
requiring prompt payment of out¬ 
standing charge accounts, which were 
not regulated before, broadening the 
list of commodities covered by install¬ 
ment regulations, reducing maturity 
periods, and increasing down pay¬ 
ments. 

Steps to Control Price Rises: 

a. Price Control. 

April 28, 1942.—OPA issued General 
Maximum Price Regulation, ending 
the period of selective control—i. e., 
control over selected commodities. 
Selective controls had been extended 
to 55 percent of the economy at the 
wholesale level, but, with minor ex¬ 
ceptions, control of retail prices was 
nonexistent. The GMPR brought an 
additional 28 percent of wholesale 
prices under control and placed ceil¬ 
ings over 62 percent of the cost of 
living. The GMPR froze prices of 
all commodities (with certain stated 
exceptions) at the highest level 
charged by each seller during March 
1942. Certain categories of prices 
were exempted from the GMPR (1) 
because control was considered to be 
inadvisable (e. g., newspapers, books, 
motion pictures, etc.) or (2) because 
control would be difficult (e. g., 
highly seasonal fresh vegetables). 
(3) Also exempted were commodities 
covered by other regulations issued 
by the Office. But by far the most 





Economic Stabilization To Keep Down the Cost of Living 


Page 11 


important prices not covered by the 
GMPR were (4) farm prices, which 
according to the original Price Con¬ 
trol Act, could not be controlled until 
they reached levels substantially 
above parity. 

February 23, 1943.—To halt the sky¬ 
rocketing of fresh vegetable prices as 
a result of the imminent rationing of 
dried, frozen, and canned vegetables, 
OPA froze the prices of tomatoes, 
snap beans, carrots, cabbage, and 
peas. (TMPR 28.) Lettuce and 
spinach were controlled shortly after¬ 
ward. (TMPR 29.) After this ac¬ 
tion, the only foods still uncontrolled 
at retail were chiefly fresh fish, fresh 
fruit, and lesser vegetables, such as 
sweet potatoes, broccoli, artichokes. 

March 15,1943.—Dollar and cent ceil¬ 
ings were announced for retail pork 
prices. These were the first dollar 
and cent ceilings on food products 
and were expected to be an effective 
blow to black markets in meats. 

6. Rent Control. 

April 28, 1942.—Following the Presi¬ 
dent’s 7-point program, OPA named 
302 additional areas as subject to 
Federal rent control. In May, rents 
reached their highest point and re¬ 
ductions began to outweigh increases. 
By January 1,1943, Federal rent con¬ 
trol had been inaugurated in 355 
areas with a population of approxi¬ 
mately 76 million. 

c. Stabilizing Farm Prices. 

September 7, 1942.—The President 
addressed a message to Congress 
calling for prompt amendment of the 
Price Control Act to permit control of 
farm prices when they reached par¬ 
ity. Although prices controlled by 
the GMPR were stabilized, prices 
which could not be controlled because 
of the limitations in the Price Control 
Act regarding farm commodities were 


rising at an accelerating rate. Rising 
farm prices were driving up retail 
food prices and the cost of living. In 
the three months from May to Au¬ 
gust 1942, wholesale prices of com¬ 
modities other than farm products 
and food had been held unchanged, 
but prices received by farmers had 
risen over 7 percent, wholesale prices 
of food almost 2 percent. Retail food 
prices had risen nearly 4 percent, 
while other components of the cost of 
living had remained virtually un¬ 
changed or had been cut. Immediate 
stabilization of farm prices and wages 
was imperative, but one could not be 
achieved without the other. 

October 2, 1942.—An Act amending 
the Price Control Act was passed 
which authorized the President to is¬ 
sue a general order stabilizing prices, 
wages, and salaries affecting the cost 
of living. It permitted the establish¬ 
ment of a maximum price for an agri¬ 
cultural commodity at parity or the 
highest level attained between Jan¬ 
uary 1 and September 15, 1942, 
whichever was higher. It also pre¬ 
vented public utilities from increas¬ 
ing rates over September 15, 1942, 
level, without giving 30 days’ notice, 
to the agency designated by the 
President and without consenting to 
the intervention of that agency. It 
provided floors under certain basic 
farm prices for 2 years after the war. 

October 5,1942.—The Act of October 
2 made it possible to issue Temporary 
Maximum Price Regulation No. 22, 
bringing the following foods under 
control at both wholesale and retail 
levels: poultry, butter, cheese, evap¬ 
orated milk, eggs, wheat flour, corn 
meal, onions, navy beans, and oranges. 
This action raised the proportion of 
retail foods under control to 90 per¬ 
cent. With passage of the Act of 
October 2, the battle to extend the 





Page 12 


Economic Stabilization To Keep Down the Cost of Living 


coverage of price control was sub¬ 
stantially over. 

January 13, 1943.—Com prices were 
placed under temporary freeze. The 
rise in corn and other important feed 
prices had been raising costs of live¬ 
stock, dairy, and poultry producers. 

March 12, 1943.—Permanent ceiling 
on corn prices replace the temporary 
freeze. 

d. Stabilizing Wages. 

July 16,1942.—The War Labor Board 
announced the “Little Steel” formula. 
Between January 1, 1941, and May 
1942 (when the GMPR went into 
effect), the cost of living had in¬ 
creased about 15 percent. According 
to this formula, petition for wage 
increases were granted by WLB only 
if the straight-time hourly wage 
rates of the workers in question had 
risen less than 15 percent since Jan¬ 
uary 1, 1941. Otherwise, claims for 
wage adjustments had to be based 
upon the inequalities or the sub¬ 
standard conditions referred to in 
the President’s message of April 27, 
1942. 

October 3, 1942.—Under authority of 
Act of October 2, the President cre¬ 
ated the Office of Economic Stabiliza¬ 
tion, appointed Supreme Court Jus¬ 
tice James F. Byrnes as Director, and 
ordered him to form a comprehensive 
national economic policy to prevent 
increases in the cost of living. The 
Order extended the functions of the 
National War Labor Board to all in¬ 
dustries and all employees, stated 
that changes in wage rates were not 
authorized unless approved by the 
Board, and ordered the Board not to 
approve increases in wage rates pre¬ 
vailing on September 15, 1942, unless 
necessary to correct maladjustments 
or inequalities, to eliminate substand¬ 
ards of living, to correct gross inequi¬ 


ties, or to aid in the effective prosecu¬ 
tion of the war. 

In manufacturing industries from 
September 1942 to February 1943, 
straight-time hourly rates in all man¬ 
ufacturing increased 1.9 cents, or a 
third of the rise during the same 
months the year before. This figure 
overstates the actual change in wage 
and salary rates, since it includes up¬ 
grading and shifts to higher-paid war 
jobs. 

All wage changes which would re¬ 
quire a change in the maximum price 
of the commodity or service affected 
had to be approved by the Director 
of Economic Stabilization before such 
increases could be effective. This was 
necessary in only four out of every 
1,000 cases. 

The President also directed that ac¬ 
tion be taken immediately to stabilize 
prices under the additional authority 
conferred by the Act of October 2. 
The President directed that the Price 
Administrator, in fixing and adjust¬ 
ing prices, shall determine price ceil¬ 
ings which would prevent unreason¬ 
able and exorbitant profits. 

e. Rationing. 

Between May 5, 1942, and March 29, 
1943, the following scarce essential 
commodities were rationed to insure 
fair sharing by civilians: 

Sugar. 

Gasoline (to conserve the Nation’s 
mileage and in the 17 eastern 
States to conserve gasoline and 
fuel oil transportation facilities 
as well). 

Bicycles. 

Men’s rubber boots and work shoes. 

Fuel oil. 

Coffee. 

Heating stoves (in 33 States where 
fuel oil is rationed). 

Shoes. 





Economic Stabilization To Keep Down the Cost of Living 


Page 13 


Processed foods—canned, dried, 
and frozen fruits and vegetables. 

Meats and edible fats and oils 
(bringing about one-third of all 
foods under rationing). 

4. The “Hold-the-Line Order” of April 8, 
19 US. 

April 8, 1943.—The President issued his 
Executive Order to “hold-the-line.” The 
Price Administrator, and in the case of 
agricultural commodities, the Price and 
Food Administrators were directed to 
place ceiling prices on all commodities 
affecting the cost of living, to authorize 
no further increases in ceiling prices ex¬ 
cept to the minimum extent required by¬ 
law, and to use all their lawful powers 
to reduce prices which were excessively 
high, unfair, or inequitable. The War 
Labor Board and other agencies having 
powers over wages and salaries were 
directed to permit no further increases 
except in accordance with the Little 
Steel formula or when clearly necessary 
to correct substandards of living. The 
War Manpower Commission was author¬ 
ized to issue regulations forbidding the 
transfer of employees to higher paying 
jobs unless the change would facilitate 
the prosecution of the war. Attention 
of all Federal, State, and municipal 
agencies concerned with common carrier 
or other public-utility rates was directed 
to the stabilization program so that in¬ 
creases will be disapproved and reduc¬ 
tions effected to carry out purposes of 
the program. 

5. Actions Subsequent to the “Hold-the- 
Line” Order. 

April 9, 1943.—WLB held 10,000 appli¬ 
cations for wage increases based on the 
existence of inequalities and gross 
inequities. 

April 10, 1943.—The War Food Admin¬ 
istration announced that live hog prices 
were out of line with ceiling pork and 
lard prices and should come down from 


$1.50 to $1 a hundredweight, and that 
ceilings would be worked out to be 
placed on live hogs if necessary to get 
the prices down; also that corn prices 
would be raised immediately by the 
amount of the 5 cents to accrue in stor¬ 
age fees for the remainder of the mar¬ 
keting season; to get corn moving and 
change the feed-hog price ratio in a di¬ 
rection favoring marketing of hogs. 
During the next 15 days, the live hog 
prices declined from $16 top at Chicago 
to a top that has since fluctuated between 
$13.88 and $15.05. 

April 11, 1943.—The War Manpower 
Commission issued regulations prevent¬ 
ing changes from lower paid to higher 
paid jobs in essential industries with 
minor exceptions. 

April 24, 1943.—The Office of Price Ad¬ 
ministration and the War Food Admin¬ 
istration announced a plan for stabiliz¬ 
ing cotton prices at the existing levels 
through sales of Commodity Credit Cor¬ 
poration cotton, calling CCC loans on 
long-staple cotton, and taking immediate 
steps to formulate a permanent maxi¬ 
mum price regulation for raw cotton for 
imposition if and when necessary. 

April 30, 1943.—Price Administrator 
Prentiss Brown announced that OPA 
would (1) reduce prices of meat, fresh 
and canned vegetables, coffee, and other 
products; (2) extend price control to 
every important commodity; (3) estab¬ 
lish specific dollars-and-cents top legal 
prices for foods so that buyers and sell¬ 
ers may know what the legal prices are; 
and (4) bring violators to justice. 

May 9, 1943.—OPA announced a new 
plan of fixing retail prices in food stores 
known as the “market basket” plan. 
Under this plan, definite dollar and cents 
community prices have been established 
on a number of commodities. These 
prices were made effective in 300 cities, 
and the plan is being expanded as rapidly 
as possible to include the entire country. 





Page 14 


Economic Stabilization To Keep Down the Cost of Living 


The list of top prices announced the first 
week of the program represented well 
over 50 percent of the average family’s 
budget. By now (July 1943) most of 
the food budget is covered by top legal 
prices. The top price plan for food, 
together with the OPA Rent Control 
program, now provides the consumer 
with visible price ceilings for items total¬ 
ing nearly 60 percent of the entire cost 
of living. The top prices are the high¬ 
est prices at which any store in the com¬ 
munity may sell commodities coming 
under the regulation. 

Market basket top prices are published 
in newspapers and the consumer is 
expected to be her own “policeman.” 

May 12, 1943.—The Director of Eco¬ 
nomic Stabilization clarified the “Hold- 
the-Line” Order, setting down guides 
and limits for permitting the War Labor 
Board to correct substandards of living 
and to make adjustments within the 
existing price structure in order to aid in 
the effective prosecution of the war or to 
correct gross inequities. Such adjust¬ 
ments could only be made up to the mini¬ 
mum of the “wage-rate brackets” for 
each occupational group. No adjust¬ 
ment of wages already within these 
brackets will be allowed. Adjustments 
called for by the Little Steel formula 
(15 percent over the January 1941 lev¬ 
els) were excepted. 

May 28,1943.—The Office of War Mobil¬ 
ization was established with James F. 
Byrnes as its Director. Judge Fred M. 
Vinson of the U. S. Circuit Court of 


Appeals was appointed to succeed him as 
Director of the Office of Economic Sta¬ 
bilization. 

June 10, 1943.—The OPA rolled back 
the cost of butter. Prices were reduced 
10 percent (on the average, five and one- 
half cents a pound). So that prices could 
be reduced without lowering returns to 
producers or “squeezing” processors, 
subsidies were paid to the latter. 

June 18, 1943.—The WLB, which on 
May 25 denied any general wage in¬ 
crease to 450,000 bituminous coal 
miners, represented by the United Mine 
Workers, denied the miners’ demand for 
$2-a-day portal-to-portal pay. The 
Board found that the workers were not 
entitled to any general increase under 
the national economic stabilization pol¬ 
icy, and that the question of portal-to- 
portal pay was one for determination by 
the courts. 

June 21, 1943.—Prices of meat were 
“rolled back” approximately 10 percent 
by methods similar to those used to 
reduce the price of butter. 

June 23,1943.—A general wage increase 
of 8 cents an hour for 1,100,000 non¬ 
operating railway employees, recom¬ 
mended to the President by an emer¬ 
gency board of the National Railway 
Labor Panel, was returned to the board 
by Judge Fred M. Vinson, Director of 
Economic Stabilization. Judge Vinson 
authorized the board to reconsider its 
recommendation and make a revised 
recommendation to the President. 





Economic Stabilization To Keep Down the Cost of Living 


Page 15 


III. Objectives of the Information Program 


The primary objective of an information 
program to combat the rising cost of living 
must be this: 

To create such an understanding of the 
problem that people will be impelled by their 
own self-interest and patriotism: 

1. To accept measures which are necessary 
to relieve the pressure on prices as well 
as those necessary to control prices and 
wages. 

2. To help make such measures effective by 
their own actions ... by themselves 
doing the right things and by resisting 
the efforts of others to try to make big 
money out of the war. 

Only when people are impelled by a clear 
understanding of the problem and their 
personal stake in it, will they take the follow¬ 
ing essential actions: 

1. Refrain from letting their money exert 
an additional pressure on prices by will¬ 
ingly accepting and supporting higher 
taxes, even for themselves, if called 
upon to do so; 


by buying and holding War Bonds to the 
full extent of their ability; 

by establishing and maintaining a sav¬ 
ings account and keeping up their life 
insurance; 

by paying off their debts and avoiding 
making new ones. 

2. Hold down their own prices, wages, and 
salaries by asking no more in prices or 
wages and salaries than they absolutely 
must. 

3. Help hold down prices generally by pay¬ 
ing no more than ceiling prices; 

by supporting rationing, and by buying 
only what they need, thereby reducing 
civilian demand. 

4. Resist the efforts of others to raise their 
prices, wages, and salaries by clearly un¬ 
derstanding that success in combatting 
rising prices depends upon the coop¬ 
eration of all —businessmen, farmers, 
workers, housewives, and Government. 





Page 16 


Economic Stabilization To Keep Down the Cost of Living 


IY. Suggested Information Approach 


General Cautions: 

In developing the information program, 
certain general cautions should be observed 
to ensure a more coherent and more easily 
understandable attack on the whole prob¬ 
lem. These cautions should be continuously 
checked when developing output. 

1. The problem should be explained in 
simple, personal terms wherever pos¬ 
sible. 

Few people understand exactly how 
taxes they pay and Bonds they buy help 
win the war and help ensure economic 
stability. 

Although they agree that the “other 
fellow” should hold his prices and wages 
down, few people realize that they too 
must do the same. 

2. Because the explanation of this entire 
problem necessarily involves a rather 
negative emphasis, those using the pro¬ 
gram book may tend to neglect the 
highly essential emphasis on “action.” 
Part of this condition is met by other 
specific programs, war bonds, price ceil¬ 
ings, rent control, which are devoted 
very largely to getting action from the 
people to do certain concrete things 
which will have an anti-inflationary im¬ 
pact. Nevertheless, it is important to 
develop an action emphasis in this pro¬ 
gram, not by avoiding or subordinating 
the explanatory phase, but by utilizing 
the explanation to convince people that 
they should act in a way to support 
the inflation controls. Explanation, in 
itself, is not enough, and may tend to 
develop unwarranted expectations of 
price rises. The program will not suc¬ 
ceed as a result of understanding alone, 
but as a result of actions. 

3. The word “ inflation” should be avoided 
wherever possible. 


It has so many connotations in the pub¬ 
lic mind that leading public opinion 
analysts agree that people generally 
have no clear understanding of the term. 
The following terms are believed to be 
clearer: 

High cost of living. 

Rising prices 

It is important that emphasis should be 
made in terms of “holding prices down,” 
“keeping prices and wages stable,” etc. 

4. AVOID CREATING FEAR ABOUT 
PRICES. 

This is of the utmost importance, be¬ 
cause such fear in itself can cause prices 
to get out of control. If people expect 
prices to rise wildly, they will bid 
against each other, thus causing the 
very condition they are trying to avoid. 

For the same reason, parallels between 
our present problem and past uncon¬ 
trolled price rises must be made with the 
greatest care. 

For instance, public opinion studies 
show that people generally have no real 
fear that we will have the German type 
of inflation at the close of the last war. 
They probably tend to be right in this. 
The German Government printed paper 
money recklessly. In this country we 
have an effectively controlled banking 
system which could be made a mecha¬ 
nism for inflation, but which can also be 
used to restrain inflation. 

The fundamental difference, however, is 
that defeated Germany with its indus¬ 
trial plants run down, its manpower re¬ 
duced, and its export trade completely 
disrupted had to meet reparation and 
other demands that strained her econ¬ 
omy past the breaking point. The des¬ 
perate government knew only one way 
to take resources from a demoralized 





Economic Stabilization To Keep Down the Cost of Living 


Page 17 


people: hyperinflation. This will not 
happen here because we will not be de¬ 
feated. Our economic machine will not 
break down and our productive capacity 
will continue to be adequate to meet the 
demands that will be made upon it. 
Moreover, because the nature of infla¬ 
tion is better understood than it was 25 
years ago, we know what we must do to 
prevent it. 

5. All phases of the economic stabilization 
program should be consistently linked 
together. 

The different phases are interdependent. 
One phase may be emphasized in a par¬ 
ticular instance, but its relationship to 
other phases should always be clearly, if 
briefly, indicated. 

6. Always stress that prices can be con¬ 
trolled and that action is being taken to 
control them. 

7. Generally the first approach to convince 
people to action on some aspect of the 
inflation program should be positive 
rather than negative. The approach on 
price ceilings is likely to be better 
understood if the approach is: “Sup¬ 
port Price Ceilings. Look for the 
posting of ceiling prices. That is the 
way to help your country’s program to 
control prices, etc.,” rather than “Don’t 
pay more than ceiling prices. It’s un¬ 
patriotic, etc.” Likewise on the subject 
of wages, the first approach should be 
positive. For example, “Be Patriotic. 
Help support rationing and price con¬ 
trol in order to keep prices down. And 
do your share to keep your wages from 
rising, for if they go up, prices will go 
up too.” 

Specific Suggestions: 

Because of the nature of the objectives, the 
information approach logically divides itself 
into two phases: 


A. “Understanding” —what people must 

understand to ap¬ 
preciate the pro¬ 
gram and the need 
for action. 

B. “ Action” —what people can do 

to prevent rising 
prices and ensure 
economic stability. 

Suggestions as to these two phases follow: 

A. “Understanding” suggestions: 

1. People must understand that the 
higher incomes which many of them 
enjoy today arise directly out of the 
war. 

2. People must understand— in simple, 
personal terms —how prices can go 
too high unless all of us take the 
proper safeguards. 

“All of us” means businessmen, 
farmers, workers, housewives, and 
Government. 

They must understand that keeping 
prices under control is their personal 
responsibility —that their individual 
actions, multiplied by similar actions 
of thousands of others, either can 
create rising prices or can promote 
economic stability, speed victory, 
and help ensure the full attainment 
of the benefits of the peace to come. 

3. People must understand the elements 
of the program to keep prices and 
wages stable and the relation of 
each element to the rest of the pro¬ 
gram. It must be remembered the 
program is two-sided, invoking both 
Government and civilian action. 

People must understand the pur¬ 
poses of the program as a whole and 
of each of its component parts. In 
general, the measures fall into two 
broad groups. (See page II.) The 
first group is designed to reduce the 
number of dangerous dollars in cir¬ 
culation and thus ease the pressure 





Page 18 


Economic Stabilization To Keep Down the Cost of Living 


on 'prices. High taxes, profit con¬ 
trol, War Bond purchases and sav¬ 
ings all contribute to this end. The 
discouragement of unnecessary buy¬ 
ing and restrictions on installment 
and credit purchases are similarly 
intended to reduce the pressure on 
prices. The second group of meas¬ 
ures seeks to control prices di¬ 
rectly— by means of price ceilings 
and the stabilization of wages and 
farm prices; and to insure a fair, 
orderly distribution of the goods 
which are available through ration¬ 
ing. 

All elements of the program should 
be treated together, even though one 
may be emphasized at the particular 
time; that is, all elements should be 
mentioned when one is. It is espe¬ 
cially important to point out this in¬ 
tegration in connection with wage 
and price increases. For instance, 
keeping prices down makes it possi¬ 
ble to keep wages down; or keeping 
wages down makes it possible to 
keep prices down; or buying bonds 
reduces the amount of spending 
money, which consumers use to bid 
up prices of scarce goods, and if 
prices go up, wages rise, so that 
when you buy bonds you help keep 
wages and prices down. 

They must understand that this pro¬ 
gram has been reasonably success¬ 
ful thus far, but that many experts 
believe stronger controls will be nec¬ 
essary because of the growing pres¬ 
sure of excess purchasing power. 
They should be kept up-to-date on 
the progress of the program. 

4. People must understand that it is to 
their own self-interest to do every¬ 
thing possible to help hold down 
prices. 

5. People must also understand that it 
is patriotic to do so. 


6. Finally, people must understand 
that, in order to prevent prices from 
getting out of control, they must 
practice self-restraint, that self-re¬ 
straint means giving up something— 
means sacrifices —often unequal 
ones. 

This is war. All soldiers are not 
asked to make the same sacrifices, 
but all stand ready to make the great¬ 
est sacrifice if called upon to do so. 
Equal willingness to give up some¬ 
thing—to make sacrifices—is neces¬ 
sary on the part of civilians if vic¬ 
tory is to be speeded and American 
lives saved in the process. 

This point cannot be stressed too 
strongly. 

B. “Action” suggestions: 

Although activities of the Government 
must be the focal point of any effective 
program for holding down prices and 
wages and ensuring economic stability, 
civilians must carry out their share of 
the program by doing the following: 

1. Buy and hold as many War Bonds 
as you can afford. 

2. Pay willingly any taxes . . . in¬ 
creased taxes . . . that your coun¬ 
try needs. 

They are the cheapest way of pay¬ 
ing for the war ... of buying vic¬ 
tory and protection for the American 
way of life. 

3. Pay off your debts and avoid making 
new ones. 

4. Provide for your own and your fam¬ 
ily’s future with adequate life insur¬ 
ance and savings. 

5. Pay no more than ceiling prices. 
Buy rationed goods only by exchang¬ 
ing stamps. 

Rationing is your protection that you 
will get enough of scarce essential 
goods. 





Economic Stabilization To Keep Down the Cost of Living 


Page 19 


Ceiling prices are your protection 
against serious and unwarranted 
price increases—one of your main 
guarantees of economic stability. 

6. Buy only what you need. Make the 
articles you have last longer by 
proper care and avoidance of waste. 

Eat it all, wear it cut; make it do, 
or do without. 

7. Don’t try to profit from the war. 
Don’t ask higher prices if you are a 
businessman or farmer. Don’t ask 
for higher wages or salaries. 

“The only way to hold the line is to 
stop trying to find justification for 
not holding it here or not holding it 
there.” 

President Franklin D. Roosevelt, 

April 8, 19^3. 

The above seven points should be used 
together wherever possible for they are 
interdependent. They always should be 
tied to the attainment of some specific 
war objective. It should always be ex¬ 
plained how each point helps win the 
war. 

Suggestions for Treatment of “Under¬ 
standing” and “Action” Information: 

The following examples indicate how the 
problem may be presented in simple, under¬ 
standable, and personal form. The examples 
have been organized under the headings of 
the preceding “information suggestions.” 
The significance of the various elements of 
the Government’s program have been treated 
under the “action suggestions,” since it is de¬ 
sirable to tie them as closely as possible to the 
individual. 

Personal Responsibilities Entailed by Higher 
Incomes Created by the War: 

Many of us today are enjoying higher in¬ 
comes than ever before. It is a sobering 
thought, however, to remember why we have 
higher incomes. 


The reason is the war —the same war 
which, started by the Axis, has cost thousands 
of American lives and which will cost thou¬ 
sands more . . . the same war which has 
caused death and untold suffering for millions 
throughout the world. 

This Axis-created war has caused the 
greatest demand for American food and 
materials in history ... a demand which 
could be met only by more of us working than 
ever before, and by all of us working harder 
and longer. 

More people working harder and longer 
... a scarcity of labor which helped bring 
about wage increases . . . has meant more 
money in the pockets of civilians than ever 
before. The great and growing demand also 
has meant higher prices for businessmen and 
farmers so that our income is the greatest 
in history. 

There are less goods to buy and more 
money to buy them with. 

This fact, which is the simplest possible 
statement of the problem of rising prices, 
places great responsibility on the American 
people. We can do one of two things about 
it. 

1. We can use all of our higher incomes to 
scramble to get what goods are avail¬ 
able. This will start a price rise which 
can go so high as to endanger the war 
effort, create hardship for many people, 
and eventually rob all of us of the bene¬ 
fits of peace to come. High prices will 
not increase the supply of goods today. 

2. Or we can put our higher incomes to 
work at speeding victory. We can do 
this by buying and holding all the War 
Bonds we can afford, by willingly pay¬ 
ing and supporting higher taxes, and by 
saving for the future rather than spend¬ 
ing and bidding up prices now. 

The choice is ours . . . the responsi¬ 
bility ours. 

It’s up to us. 





Page 20 


Economic Stabilization To Keep Down the Cost of Living 


How Prices Rise and How They Rise Too Far 
Unless All of Us Take Proper Safeguards: 

The reason for a price rise in wartime is 
simple. Anyone can understand it. The pro¬ 
duction *of more materials for war means the 
production of less civilian goods. More peo¬ 
ple working for more money means more 
money available to spend. This increased 
volume of money competes for scarce goods 
. . . if we let it . . . and when more money 
competes for scarce goods, it bids up prices. 

But higher prices increase the cost of liv¬ 
ing, so that workers will seek higher wages 
to meet increased living expenses. Higher 
prices and higher wages will mean increased 
costs for businessmen, which they will try 
to cover by charging still higher prices. 

Higher prices will mean increased costs to 
farmers, which they will try to meet by charg¬ 
ing higher prices for farm products. But if 
farmers or businessmen charge higher prices 
for their products, this will raise the cost of 
food. Higher food prices will raise the cost 
of living and workers will want still higher 
wages, which, if granted, will increase busi¬ 
ness costs and bring a pressure for still higher 
prices . . . and these price increases finally 
will get back to the farmers who then will 
want still higher prices. 

Thus the circle goes, unless we carry out 
the control program. Each price increase 
breeds another price or wage increase; which 
in turn breeds another . . . and yet another 
. . . and the amount of goods remains the 
same. 

The Program Consists of a Series of Inte¬ 
grated, Interdependent Controls. Each 
Measure Contributes to the Success of the 
Whole. 

The Government’s economic stabilization 
measures are not arbitrary or unrelated. 
Each has a definite, functional part to play in 
the success of the program as a whole. No 
one part can be neglected or sabotaged with¬ 
out jeopardizing the success of the entire 
program. 


The seven stabilization measures fall into 
two broad groups. The first group is de¬ 
signed to ease the pressure on prices by reduc¬ 
ing the number of dollars competing for the 
limited supply of goods. High taxes and 
profit control limit the number of dollars in 
circulation. The purchase of War Bonds and 
other forms of saving divert dangerous dol¬ 
lars to safe channels. Restrictions on credit 
and installment purchasing, and self-restraint 
in buying on the part of individual consum¬ 
ers, reduce the buying pressure which, if 
unchecked, might bid prices up to dangerous 
heights. 

The second group of measures attempts to 
“sit on the lid” of rising prices. Ceilings 
have been placed on the price of most con¬ 
sumer goods, many services and rents. 
Wages and farm prices are being stabilized. 
Finally, to reinforce price control and insure 
a fair, orderly distribution of the goods 
which are available, scarce goods are being 
rationed. 

Each of these measures contributes to the 
success of the entire program. Each of them 
requires active public support. Victory in 
the war against rising prices depends on co¬ 
operation between the people and their Gov¬ 
ernment on every sector of the anti-inflation 
front. 

It Is to the Self-Interest of the Individual 

To Do Everything Possible To Help Hold 

Down Prices. 

The situation which faces us today is sim¬ 
ple to understand. We Americans have more 
income—more money to spend—than ever 
before in history. But there are less goods 
on which to spend our money. There are 
enough goods to meet most of the essential 
requirements of civilian life . . . but no 
more. If most of us make more money, 
which is what is happening, there still are 
no more goods . . . the amount of money 
doesn’t help. 

If we use our extra war-created income to 
buy this limited supply of goods—all that we 
will do is to bid up prices. 





Economic Stabilization To Keep Down the Cost of Living 


Page 21 


There won't be any more goods. We have 
had to limit the production of civilian goods 
to meet the needs of our Axis-created war. 

If we go out and buy to satisfy our whims 
and desires—rather than keeping our pur¬ 
chases to the things we really need—all we 
shall do is to pay more for the same amount 
of goods. We therefore will have less money 
available to buy new and improved goods 
later on. 

If we help bid up prices , we will increase 
materially the cost of the war. 

The many millions of people with relatively 
fixed incomes.—Teachers, other Government 
employees, veterans and veterans' families 
living on pensions, people receiving public 
assistance, families of the men in the armed 
forces—these would suffer at once. White 
collar workers, whose wages lag far behind 
changes in the cost of living, would suffer in 
almost the same degree. 

Those who received increases in wages or 
prices would live in a fool's paradise for 
which the final day of reckoning would be 
swift and certain. As prices continue to in¬ 
crease, they outstrip wages and civilian pur¬ 
chasing power is squeezed. When this stage 
is reached, any one of a number of events may 
start prices tumbling. Sharply falling prices 
produce a period of depression and business 
stagnation which hurts nearly everyone, pro¬ 
ducing bankruptcy and unemployment. 

For wage earners they mean cuts in wages, 
reduced working hours, and unemployment 
. . . less money to pay off mortgages on 
houses bought at high prices, less money to 
meet insurance premiums on policies bought 
when wages were high; less money for day 
to day needs. 

For farmers it would mean less money com¬ 
ing in to pay for farms and equipment bought 
during the period of high prices. It would 
mean failure and foreclosure for many. 

For businessmen it would mean severe 
losses and financial receivership; often receiv¬ 
ership and bankruptcy. 


None of these things need happen if all of 
us do our part to keep rising prices under 
control. 

It Is Patriotic To Do Everything Which 

Would Help To Hold Down Prices: 

1. To act contrary to the rules of the game 
is playing into the enemy's hands . . . 
is doing what Hitler wants . . . what 
Japan wants. When men are dying we 
are asked to do very little . . . espe¬ 
cially when we benefit in the long run. 

2. It would raise the cost of the war be¬ 
cause the prices of things the Govern¬ 
ment has to buy would be higher. That 
would increase the burden of taxes 
which all of us—including our fighting 
men when they returned—would have 
to pay for many years. 

3. It would cause immediate hardship for 
many people with fixed incomes—in¬ 
cluding veterans and veterans’ families 
living on pensions, families of the men 
in our armed forces, widows living on in¬ 
surance payments, etc. 

4. It would create demands for higher 
wages, foster labor disputes, hurt mo¬ 
rale and impair the war effort. 

5. Business would have to face such mad¬ 
dening uncertainties in all costs that it 
would not know how to plan its activi¬ 
ties. Business would become reluctant 
to take risks, slow up . . . and again 
the war would be impaired. 

6. At some point prices would outstrip 
wages in the race upwards. At this 
point very little would be required to 
knock down the house of cards which 
uncontrolled price rises had reared. 
When prices come tumbling nearly 
everyone would suffer, our economic life 
would stagnate in a depression, and the 
national well-being would be seriously 
damaged. 





Page 22 


Economic Stabilization To Keep Down the Cost of Living 


People Must Understand That They Must 

Practice Self-Restraint To Help Keep 

Prices Down: 

It means foregoing buying things we really 
don’t need . . . restricting our purchases to 
what is essential—so as to hold down the 
pressure of demand for the limited supply of 
civilian goods. It means that we must make 
what we have last longer—so that we will 
have to buy less. 

It means foregoing the temporary advan¬ 
tage of higher prices for the things we have 
to sell—foregoing higher wages. It means 
putting our money to work in winning the 
war by paying higher taxes and buying and 
holding all the War Bonds we can afford. 

It may mean sacrifices for some of us—but 
these are trivial sacrifices compared to those 
asked of our fighting men at the front. And 
they are sacrifices which will pay out in the 
long run—which will help keep the Nation 
strong for the fighters who are offering their 
lives for it. 

It may mean that the burden of sacrifice 
will fall unevenly and that some of us will 
have to give up more than others. But this 
is true of the fighting front as well as the 
home front. All soldiers are not asked to 
make the same sacrifices. Some die. Some 
are ordered into posts of great danger. Some 
are more fortunate. But all are ready to 
make any sacrifice which is asked of them. 
We on the home front must be willing to do 
no less. 

We must remember that living standards 
are now generally high enough to enable the 
great majority of us to exert a maximum 
productive effort in winning the war. This 
is the important thing in wartime. Govern¬ 
ment will do its best to see to it that everyone 
will get this much; but it will not encourage 
any group in its efforts to get more than this. 
Everyone must help the Government resist 
such pressures. 

The fight to hold down prices is a vital part 
of the war effort. Like the war, it has a cost, 
but it is well worth the cost. 


It involves the acceptance of controls 
throughout the war and into the peace. 
These controls are necessary to make sure 
that the program is fair to everyone, that no 
individual or group profits at the expense of 
anyone else. And that, at the war’s end, the 
Nation is sound and strong . . . the very 
things we are fighting for. 

It involves the acceptance of sacrifices, 
minor indeed when compared to the soldier’s 
offer of his life. The program cannot give 
us our peacetime habits and standard of 
living. 

It can distribute the burden of economic 
sacrifice equitably, insure a fair distribution 
of the goods and services available, and 
protect the economy which is our common 
concern. 

These benefits far outweigh the inconven¬ 
iences and sacrifice the program requires. 
Indeed, these inconveniences and sacrifices 
are not the result of the program —they are 
the result of war ... of a war caused by the 
enemy, not by you and me. We would be 
much worse off without a program, with one 
group pitted against another, with the bur¬ 
dens of war falling unevenly on different 
groups, with restricted supplies of goods un¬ 
fairly distributed. Our fight against the 
enemy, our entire social and economic struc¬ 
ture would be jeopardized by the failure of 
the economic stabilization program. We 
have an immediate and long-term stake in its 
success. 

What the Public Can Do To Help Hold Down 

Prices: 

BUY AND HOLD WAR BONDS 

Put your money to work helping to win 
the war ... all that you can afford. Keep 
on doing it. No matter how much higher 
taxes go, they still can’t pay for all of the 
war. When you buy War Bonds instead of 
goods, you also are helping in the vital fight 
to hold down prices and the price of the war. 

You are helping to hold down prices be¬ 
cause the dollars which you put into War 





Economic Stabilization To Keep Down the Cost of Living 


Page 23 


Bonds are not dangerous dollars bidding in 
the market for scarce goods . . . forcing up 
prices that in turn force up wages . . . 
creating higher prices and wages which in¬ 
crease business costs and generate a pres¬ 
sure for even higher prices . . . starting a 
rising flood of higher prices and wages that 
can lengthen the war and endanger the peace 
to come. 

Equally important, when you buy War 
Bonds you help insure your future economic 
stability and the economic stability of your 
country. You are laying aside a nest egg 
for after the war . . . for the home you want 
when civilian building resumes . . . for the 
education of your children. Save now. Spend 
when you can get your money’s worth. In 
holding down prices you are making easier 
your task and your country’s task in getting 
back to a peacetime basis. The lower we keep 
prices now, the easier it will be for all of 
us to buy the new peacetime goods . . . the 
easier to keep our factories working and all 
of us employed... the easier to build a 
strong, prosperous Nation. 

PAY WILLINGLY ANY TAXES . . . 
HIGHER TAXES . . . YOUR COUNTRY NEEDS 

They are the cheapest way of paying for 
the war—of buying victory and protection 
for the American way of life. They are the 
cheapest way because there is no interest to 
be paid; because there is no problem of retire¬ 
ment as there is with bonds—retirement for 
which funds must come from further taxes. 

Taxes also help keep down the cost of living 
by removing dangerous dollars from the mar¬ 
ket where they only bid up prices by compet¬ 
ing for the purchase of scarce goods and 
services. 

PAY OFF YOUR OLD DEBTS AND AVOID 
MAKING NEW ONES 

It’s a much better way to use your money 
than to employ it to bid up prices. If you 
pay off your debts you achieve independence. 
You are in a better position to take advantage 
of our return to peace. 


PAY NO MORE THAN TOP LEGAL PRICES 

Top legal prices are your protection against 
serious and unwarranted price increases— 
one of your important guarantees of economic 
stability. However, they will work only if 
you make them work ... if you will observe 
them in your buying, if you will help in en¬ 
forcing them. 

To make certain of paying no more than 
you should for foodstuffs, look for the list of 
top legal food prices in your newspaper and 
clip it out. When you shop, compare the 
prices of your grocer or meat dealer with the 
top legal prices listed for his particular class 
of store. Call his attention to any item that 
is overpriced. Most grocers and dealers are 
extremely honest and patriotic, and when 
mistakes are called to their attention, will 
correct them immediately. However, if your 
dealer will not correct his mistake, or continu¬ 
ously and willfully violates the price regula¬ 
tion, notify the price panel of your local War 
Price and Rationing Board. 

SUPPORT RATIONING 

Rationing not only ensures you a fair share 
of scarce commodities. It also helps hold 
down prices by stabilizing supply and 
demand. 

BUY ONLY WHAT YOU NEED 

Dollars you spend for unnecessary things 
are dangerous dollars. They compete with 
other dollars for the fewer things available 
because of the war. Hence they are the dol¬ 
lars that bid up prices. So before you buy, 
carefully look over what you have. Eat it all, 
wear it out; make it do, or do without. If 
you still think you need to buy, compare the 
slight sacrifice you would make in not buying 
with the unlimited sacrifice our fighting men 
must make without having a choice! 

DON’T ASK MORE FOR WHAT YOU HAVE TO 

SELL . . . MORE IN PRICES FOR GOODS . . . 

MORE IN WAGES AND SALARIES 

Any additional amount you ask for either 
goods or wages will only be passed on to 
others and will eventually have to be paid 
right out of your own pocket. This is in- 







Page 24 


Economic Stabilization To Keep Down the Cost of Living 


evitable because the war’s demands on our 
productive facilities and our labor supply- 
make it impossible for others to 'produce more 
or do more. No one can produce any more. 
No one can get any more. But all have to pay 
more for the same goods, the same work that 
formerly cost less. Before you charge more 
for your work or for what you have to sell, do 
this. Compare what you would sacrifice by 
foregoing a rise in your price with the many 


sacrifices our fighting men must make with¬ 
out even having a choice! 

Note.—W hile this appeal is stated last, it 
is of extreme importance. Many of us do not 
realize that in seeking more pay or profit we 
actually are profiteering at a time when sacri¬ 
fice should be the rule. It is highly important 
to get this fact across at all times in this 
program. 


I. S. GOVERI 


PRINTII 


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